Archive for July, 2007

The Daily Yonder is a new online (blogish-style) newspaper on rural issues. Backed by the Center for Rural Strategies, and actual paid staff, the site is generating original news and commentary on issues of interest to rural communities at pace that makes the site worth checking in on at least a couple of times each week.

For similar reasons, I don’t put much faith in Whole Foods’ recent promise to do more to support local farmers - an effort that would only slow the trend to corporatize the natural food market, not stop it. This week we got another reason to think Whole Foods will not be inclined to crusade for justice on any front as long as CEO John Mackey is in charge.

By now you’ve probably heard, Whole Foods CEO, John Mackey, spent much of the last two years posting anonymous diatribes online in an ongoing effort to paint his chief competitor, Wild Oats, in a negative light. Read the original story at the Wall Street Journal.

I want to draw attention to one of Mackey’s posts in particular - the one in which he talks of his love for Wal Mart, his disdain for labor unions, and his apparent dislike for anyone who might claim to be a victim of sexual or racial discrimination. Mackey writes:

Wal-Mart was just named the most admired company in America (also by Fortune Magazine — that magazine which obviously hates “working people”). I probably admire Wal-Mart more than any other company in the world (except for maybe Whole Foods!). What a great, great company! Wal-Mart has single handedly driven down retail prices across America. They have improved the standard of living for millions and millions of American people. Also Wal-Mart is crushing the parasitical unions across America. I love Wal-Mart! Damn straight that they should be on this list. Sexual discrimination lawsuits? Sexual harrassment lawsuits? Racial discrimination lawsuits? What company doesn’t have those? The Trial Lawyers (the richest professional class in the United States and the largest contributors to the Democratic Party — even bigger than labor unions which are #2) sue Wal-Mart. They sue Whole Foods Market. They sue every business which makes any money. They are probably even a bigger threat to our country than labor unions are (if that is possible?).

For Mackey, an interest in the all-mighty dollar trumps workers rights and pesky discrimination lawsuits. Mackey’s love for Wal Mart, which relies on boatloads of imported merchandise, legions of poverty-stricken workers, and clear anti-competitive practices, leaves one wondering.

Just how serious can Whole Foods possibly be about helping small, local farmers?

The Farm Bureau supports unlimited commodity subsidies — subsidies that help the nation’s largest farms drive family farmers out of business. Responding to a draft version of the 2007 Farm Bill, the Farm Bureau said in a press release:

While Farm Bureau was pleased there are no cuts to payment limits in the proposal, the organization will watch the debate closely in the future. “We recognize that the farm bill debate is far from over and that changes are likely in the coming weeks,” said Stallman. “Farm Bureau will be particularly watchful of changes to payment limitations and adjusted gross income caps.”

In so doing, Farm Bureau is protecting the interests of these “farms.”

The Farm Bureau has long claimed to be the “largest farmer-member organization” in the country, but when it comes to Farm Bill politics, they are a lobby for the interests of large agribusiness. Supporting $8 million subsidy checks is no way to be a friend of the farmer.

With their support for unlimited subsidy checks, Farm Bureau is helping to drive the continued consolidation of agriculture. I’m sure their lobbyists in Washington talk a good line about supporting farmers, but in the countryside the devastating effects of the agricultural policy they help write is clear.

A couple thousand miles and 40 years of living somewhere else separate me from Laurens these days. Yet it always will be my hometown – a special slice of Americana in which my roots always will be deepest.

I grew up in Laurens in the 1950s-60s era when “The Busiest Little Town in Iowa” had a bustling downtown of businesses that included furniture, men’s clothing, a movie theater and three grocery stores. Laurens also had an industrial base back then that included M & JR Hakes and Iowa Industrial Hydraulics; a golf course on land that once was an airport and its own consolidation-free school system.

[snip]

Jobs for Laurens kids of that era involved roll-up-your-sleeves summer tasks like cutting corn out of the beans and baling hay. Or you could bag groceries at Don’s Clover Farm or Hinn’s Super Value, pump gas for the locals (because self-service stations were years away from reality) or car-hop at the Dairy Bar or Lucky Luchsinger’s Drive-In. For younger kids on bikes, there were newspaper delivery routes around town, offering the Des Moines Register, the sister-paper Tribune and the Fort Dodge Messenger. I remember all that about Laurens, no doubt romanticizing its significance because nostalgia can do that to you.

Laurens is located in Pocahontas County. The county has been losing population every decade since Rick Davis was a boy. The population of all of Pocahontas County in 1950 was 15,496. By 2000 it had dropped precipitously to 8,662. In the years since the 2000 census Pocahontas County lost population faster than any other single county in the state.

Today there is no furniture store and no movie theater in Laurens. The town probably counts itself as lucky to still support one grocery store, and tales of three (including one that was open 24 hours a day) were just that by the time I was growing up in Laurens. I graduate from Laurens-Marathon consolidated school, and I fear that the school will soon be consolidated once more with yet another dying town nearby.

This is the story of rural communities across much of the country. Rick Davis reminds us that it hasn’t always been this way, but then he laments that he is likely being nostalgic. However, it is important to remember, one can be nostalgic for very good reasons. Laurens probably was a better place when it thrived in the ways Rick describes, and we should work to reinvigorate it - and all of rural America - to thrive once again.

In a recent trip through the small town of Walthill, Nebraska, the phrase “rural revitalization” took on a whole new meaning. In this case, it was the lack of any kind of prosperity that made it obvious to me why rural communities are in need of revitalization. Main Street looked painfully deserted, with two recent arsons adding fresh scars to the once-active storefronts. As we drove around the residential area, most houses looked to be in some state of disrepair—so much so that it was difficult to really tell which were homes and which had already been abandoned. If ever there was a town that needed some life breathed back into it, this was it.

About the same time, I read an article about the aging farmer population and the simultaneous difficulty of young and beginning farmers breaking into farming. This from John Seewer from the Associated Press:

So many American farmers are working longer than ever before that one in four is at least 65 years old. [snip] Within the next decade those older farmers will be looking for someone to take over their operations and selling millions of acres of land.

Much of that land will be merged into bigger farms with fewer people working on them. Rural communities will lose even more young people, and a few will struggle for survival. [snip]

“Some of those communities will survive, but the nature of the community will change,” said Lori Garkovich, a rural sociologist at the University of Kentucky. “Studies have shown that industrial farms change communities in many ways.”

Todd Stewart, who raises hogs and cattle near Meadow Grove, Neb., and at 47 is among the youngest farmers in the area, said it’s hard to find volunteers who will coach ball teams or help out at church anymore.

“Towns are hurting,” he said. “The school is usually the first to go, then it’s the churches and then the town. There’s going to be a lot of towns that will wither up and go away.”

Communities need people, of course, but vibrant, sustainable rural communities need people of all ages so that the infrastructure that makes a town strong—schools, churches, local businesses—are able to thrive.Farmers are a significant part of this equation, and being able to recruit young people into farming will only help to strengthen the communities in which they live.

In my last post, I talked about local ownership as a key component if rural communities will see any substantial benefit from the ethanol boom. It is clear, however, that it takes more than money to reinvigorate a community. Another component to this push for revitalization is to renew demand for the institutions that have been weakened as farms consolidated. The aspiring farmers I know are typically energetic folks who choose to come back to the land, and will greatly add to any community if only they can access the things they need to start farming.

Not coincidentally, I think about this as legislators in Washington, DC are writing the next Farm Bill. There is a lot of debate about the future of the commodity title and the need to increase money for nutrition and conservation, but often rural development seems to be thrown in as an afterthought—as if legislators know that it’s a good thing to say but think there isn’t enough political will to put their money where there mouths are.

Why aren’t rural voices demanding more from their legislators?

There clearly have been some voices, though I would argue not nearly enough. The 2002 Farm Bill included some promising provisions that help rural communities, including the Beginning Farmer and Rancher Development and the Value Added Producer Grant Program (VAPG). The former was in the 2002 Farm Bill but did not receive funding from 2002-2007, while the later usually received between $15 million and $20 million dollars annually, or about one-third to one-half of the money it was slated to receive.

The draft of the 2007 Farm Bill was just released in the House by Chairman Collin Peterson, and while these two programs are funded at $15 million for Beginning Farmer and Rancher and $20 million for VAPG, legislators will need to hear from their constituents in order for these numbers to remain strong.

A welcome addition to the 2007 draft is the Rural Entrepreneurs and Microenterprise Development program, which would provide technical assistance and loans for starting a rural business. However, unlike the other two programs I mention, a slight technical difference in the language for the Microenterprise program means there’s no guarantee it will see a dime.

Rural communities aren’t receiving fair treatment in federal legislation, which is slightly ironic considering that it’s the Farm Bill, and most farming occurs in rural areas. This bill is a great opportunity to push for the rural revitalization that legislators keep promising—not with haphazard handouts but with strategic investments that assist new, resourceful, innovative farmers establish new roots and bring young people back to rural communities.

The League of Rural Voters is going to bat to support the proposed merger between the only two satellite radio companies - Sirius and XM. I wrote about this puzzling dynamic at some length a few weeks ago. You can read that analysis here.

The report seeks to rebut the argument that the proposed merger between Sirius and XM is similar to the proposed merger between satellite television providers Echostar and DirectTV. The FCC rejected that merger citing concerns over a lack of competition, consumer choice, and diversity of viewpoints in the market. In the latter half of my original post on this topic, I wrote about the rejected Echostar/DirectTV merger and its relation to the proposed Sirius/XM merger.

Quite aware of the argument against their position, the League of Rural Voters wrote the following in their press release:

League Of Rural Voters: SIRUS/XM merger is not ECHOSTAR/DIRECTV

The League of Rural Voters (LRV) today released a new analysis drawing clear differences between the DBS [Direct Broadcast Satellite] market in the 2002 Echostar/DirecTV attempt to merge, and the expanding, competitive audio entertainment market in the SIRIUS/XM merger. In doing so, LRV reaffirmed its support for the proposed merger between SIRIUS Satellite Radio (Nasdaq: SIRI) and XM Satellite Radio (Nasdaq: XMSR).

The press release links to a five page report (pdf) on the League of Rural Voters’ website. The report, with the League’s logo stamped on the front, sets out a point-by-point argument to show how the Sirius/XM merger is “A Fundamentally Different Merger for Rural Consumers” than the proposed Echostar/DirectTV merger was. The report takes up the FCC’s reasons for rejecting the satellite TV merger and offers a brief narrative in response to each to show that “Such concerns do not apply to satellite radio.”

I am not going to do a detailed analysis of the report right now. I will say this though, it certainly does not read like a report that vigorously examines the issue, and then draws a conclusion based on sufficient evidence pointing in one direction. Rather, it summarily dismisses each point from the Echostar/DirectTV case with very little real analysis of the issues at hand. But I want to leave the conclusion of the report aside for now. There are more interesting things going on here.

Of primary interest to me at this point is why the League of Rural Voters cares so much about this issue. The League has published a grand total of of 5 press releases since October of 2006, and two of them have been about their support for the Sirius/XM merger. They only list one other report on their website. This is not a group that runs around issuing press releases and reports on everything under the sun of possible interest to their cause. The League’s support of the proposed satellite radio merger represents a significant part of their work this year.

So, why satellite radio? The question simply baffles me. It is a Farm Bill year, after all. The Farm Bill is arguably the piece of legislation of most interest to rural issues, and it only comes up for debate and changes once every five years. One might think the Farm Bill would be of interest to the League of Rural Voters. However, on their website they have only a “Coming Soon” message on their 2007 Farm Bill page. Why does the League of Rural Voters feel compelled to spend time fighting to allow a merger of Sirius and XM radio, but lack the time to develop even a single page on their website about the 2007 Farm Bill?

Got a big business deal in the works? Start lining up interest groups.

Worried about the proposed merger between the XM and Sirius satellite radio services? So are more than 70 members of Congress, Consumers Union, the Consumer Federation of America and the American Antitrust Institute, among other groups.

The article goes on to discuss this phenomena — whenever regulators are set to make an important and controversial decision, a “swarm of advocacy groups representing a rainbow array of ethnic groups, regional interests and other constituencies” emerge out of the woodwork to comment.

Some of them weigh in on their own accord. For example, Consumers Union and Consumer Federation routinely take positions on mergers involving telecommunications services (and, typically, oppose them). But other groups step up to the microphone at the behest of parties most affected by the government’s action. It’s become part of the game: If you want the Federal Communications Commission (FCC) to bless your merger, as XM and Sirius do, you line up as many grass-roots allies as you can. Your opponents do too.

[snip]

Given the stakes involved, it’s not surprising that the process has been abused. [snip] There’s also the practice of pouring money into supposedly independent research groups, then trotting out studies that, amazingly enough, support their benefactors’ point of view.

[snip]

[Grassroots groups have] also helped XM and Sirius advance an argument that the publicly traded services can’t make themselves: that the two companies are too weak to survive as independent entities.

That’s one of the points made by the Minneapolis-based League of Rural Voters, which joined the debate at the behest of XM and Sirius. It released a report last week that argued the merger was fundamentally different from the proposed merger of satellite TV providers DirecTV and EchoStar, which the FCC unanimously rejected in 2002. Niel Ritchie, the league’s executive director, admitted that “the XM guys did this particular study,” but he said he agreed with its conclusions and was happy to put it out under the league’s banner.

Well now. The League of Rural Voters didn’t find their interest in satellite radio on their own. They entered the debate at the “behest of XM and Sirius.” And that not-so-balanced report (pdf) published by the League of Rural Voters was actually written by the corporate interest under scrutiny for their proposed merger. I double and triple checked. There is nothing in the report that indicates any authorship other than the League of Rural Voters.

I’ll leave it there for tonight. You all can draw your own conclusions from those last pieces of information.